Comment: The real web marketing spend? Far more than we think.

Online will be over £3bn this year and take over a quarter of all adspend. In the first half it’s up a respectable 5% year-on-year, while the rest of the ad industry tumbled over 15%. In that context, bucking the trend by 20% is a massive achievement for online media brands, the technologies behind them and digital media planners who made the case for budget. But the switch to the web is also a switch out of advertising and into smarter, more integrated models of communication. Brands don’t need to buy time to interrupt consumers, and marketeers in the UK have been at the heart of those innovations.

The UK has always been at the leading edge of online marketing. In the early 90s its publishers were among the first in the world to migrate to the web, defining the nature of online news media. In the mid nineties a group of us set up the IAB to help accelerate change and make online easier for brands to buy by putting in place the right research and structures for trading. The model of the ‘portal’ took off faster and steeper in the UK than anywhere outside the US. Yahoo and then Google tapped into the demand for instant response advertising in the UK as deeply as any market, and London’s latest claim as Twitter capital of the world is a reminder that this is happening again with social media.

Recession forced innovation in the marketing mix and advertising is one of many casualties. On the web we’re a long way from the market saturating so the growth will continue comfortably for the next 5 years: more people, more websites, more time online, faster connections, the final arrival of the mobile web – those remain strong drivers.

The continued rise of search as an efficient, digitally native, direct response channel will not slow. And both paid for links and optimization will accelerate as they explode onto smartphone handsets with new apps and new interfaces. In recession search engine marketing is seductive to finance directors and in strong markets it should be woven throughout the media mix.

Online classified are rising steadily – up 10% year on year – as the print classified market continues to hemorrhage. The £385m that went into web classifieds in the first half of this year doesn’t match the losses in print because on the web the rates are much cheaper and many sectors like real estate have created their own sites and aggregators, circumventing the need for the traditional advertising model.

But don’t misread the data.

Today’s announcement about the size of the online ad industry hides a much bigger shift. Almost every firm in the UK has some sort of website, the smallest of SMEs worry about their rankings in Google, local football clubs have email relationship marketing programmes and social media pages, and any marketing exec can handle a simple content management system. As online marketing cemented itself in the mainstream, marketers who started out on the web with banners and links have started exploring the rest of the digital toolkit. The biggest shifts in marketing energy, time, and spend are those are not even being tracked. This research counts the cash spent on advertising. It’s a rigorous methodology, but misses the billions of emails brands send, the billions of hours updating and managing website content, the content and discussions in social media, and the huge energies in SEO to get listed higher and higher in Google. The advertising industry needs to accept it will never bounce back to the 90s heydays because the role of advertising in the communications mix has changed for good. For many brands in many sectors there are simply smarter models that don’t demand 90% of the marketing budget going into media space.

If all the energy going into digital marketing could be tracked it would dwarf the online advertising sector.